In today’s briefing:
- Tokyo Metro (9023 JP): Listing Tomorrow; Div Yield and Index Flows Should Take It Higher
- The Tokyo Metro (9023 JP) IPO And Aftermarket – What To Look For
- Australia: Potential Passive Selling in November Will Be Big
- Shinko Electric (6967 JP): A Casualty of the China TCM Deal Break
- Quiddity Leaderboard T50/100 Dec 24: Two Important Takeaways for the TDIV Index
- KRX’s Final Call on Value-Up ETF Launch & December Rebalancing Preview
- Quiddity Leaderboard TDIV Dec 24: Trade Successful; +9.5% in Three Weeks; More Upside Possible.
- NIFTY200 Momentum30 Index Rebalance Preview: 56% Turnover, Big Trade & Strong Momentum
- CEMEX’s Low-Balled MTO. For Good Reason
- Laopu Gold (6181 HK): IPO Lock-Up Expiry Might Prove Golden for Global Index Inclusion
Tokyo Metro (9023 JP): Listing Tomorrow; Div Yield and Index Flows Should Take It Higher
- Tokyo Metro (9023 JP) priced its IPO at the top end (JPY 1200/share), raised JPY 348.6bn (US$2.3bn) and the company is valued at JPY 697bn (US$4.62bn).
- The stock starts to trade today, and the grey market is indicating an open 20% higher. Not surprising considering that the IPO was heavily oversubscribed.
- Even at a price of JPY 1440/share, the estimated dividend yield is 2.78% and that should keep the stock supported. Index inclusions will result in more buying next week.
The Tokyo Metro (9023 JP) IPO And Aftermarket – What To Look For
- The Tokyo Metro (9023 JP) IPO is one of the largest IPOs of recent years, well-flagged, and it is hot hot hot! A super stable, well-known, well-respected, service provider.
- There are numerous attractions but I expect people have not thought too deeply about the demand and supply dynamics of different holder types. It’s worth thinking about.
- This was priced “cheap” but everyone knows that so there may be flippers. This is probably more Japan Post Bank than Japan Post Insurance.
Australia: Potential Passive Selling in November Will Be Big
- There could be two or three Aussie names that are deleted from global passive portfolios in November. In each of the cases, there is a lot to sell from passives.
- One name is very high probability while the deletion of the others depends on the day of the week chosen.
- Shorts have been built up on the stocks and there are strong indications of positioning. But the extent of the positioning varies, and the stocks could have differently.
Shinko Electric (6967 JP): A Casualty of the China TCM Deal Break
- At first glance, the Shinko Electric Industries (6967 JP) and China TCM merger arb has little or no similarities regarding the region, precondition, sector, type of offeror, or offer structure.
- The aftermath of China Traditional Chinese Medicine (570 HK) has resulted in funds resizing well-held merger arb positions, mainly long-dated names with tail event risks. This has increased the Shinko spread.
- Shinko’s tail event risk (no SAMR approval) remains low. Timing remains the primary risk, as a delay is possible. At the last close, the gross/annualised spread was 8.9%/29.2%.
Quiddity Leaderboard T50/100 Dec 24: Two Important Takeaways for the TDIV Index
- The T50 index represents the top 50 largest stocks by market capitalization in the Taiwan Stock Exchange (TWSE). The T100 index represents the next 100 largest names (51-150 ranks).
- In this insight, we take a look at the potential ADDs and DELs for the December 2024 index rebal event.
- Currently, we see one change for T50 and two changes for T100 but there are four more weeks to the base date and our expectations can change until then.
KRX’s Final Call on Value-Up ETF Launch & December Rebalancing Preview
- Despite feedback from ETF managers, KRX is moving forward with the simultaneous listing of 12 ETFs tracking the Value-Up Index on November 4th.
- Government-Backed organizations are launching a 200 billion KRW Value-Up Fund for the Value-Up Index stocks, targeting an AUM boost to over 1 trillion KRW by year-end.
- For new additions in the December rebalancing, the safest bets are POSCO Holdings, JB Financial Group, and HK inno.N.
Quiddity Leaderboard TDIV Dec 24: Trade Successful; +9.5% in Three Weeks; More Upside Possible.
- In this insight, we take look at Quiddity’s expectations for index changes and capping flows for the TDIV Index for the December 2024 index rebal event.
- I currently see 5 ADDs and 4 DELs but some of these names are different from what we had last time (link).
- The current estimate for one-way flow in December 2024 is US$1.54bn.
NIFTY200 Momentum30 Index Rebalance Preview: 56% Turnover, Big Trade & Strong Momentum
- There could be 16 changes for the Nifty200 Momentum 30 Index that will be implemented at the close on 30 December.
- If all changes are on expected lines, one-way turnover is estimated at 55.6% and that will result in a one-way trade of INR 62bn (US$736m).
- Since June, the potential adds to the index have outperformed the index and the potential deletes by a big margin. Momentum could keep the outperformance going till implementation date.
CEMEX’s Low-Balled MTO. For Good Reason
- Back on the 25th April 2024, a Dacon/DMCI Holdings (DMC PM)-led consortium entered into a SPA to acquire 89.86% in CEXMEX (CHP PM) from Cemex SAB de CV (CEMEXCPO MM).
- The completion of the sale triggered a mandatory tender offer for the remaining 10.14% of shares out. The Offer Price is ₱1.42/share (before considerable fees), a 8% discount to undisturbed.
- The Offer Period spans October 23 to November 21. There’s the possibility of a technical bump. Don’t expect a follow-on delisting Offer. The Bidders’ intention is to maintain CEMEX’s listing.
Laopu Gold (6181 HK): IPO Lock-Up Expiry Might Prove Golden for Global Index Inclusion
- Laopu Gold (6181 HK) is expected to fail the fcap threshold at the December 2024 review due to low free float unless its price surges ~22% in the next week.
- The 6-month lock-up expiry will lift the fcap closely above the threshold significantly increasing the probability of inclusion at the March 2025 review.
- If the mcap qualifies for the small-cap segment, its inclusion is possible at the November 2024 review due to lower fcap requirements.
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